U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission

Management Report to Accompany

the Office of Inspector General

Semiannual Report to Congress

For the period April 1, 2023 through September 30, 2023

November 2023

U.S. SECURITIES AND EXCHANGE COMMISSION

Management Report to Accompany the

Office of Inspector General Semiannual Report to Congress

April 1, 2023 – September 30, 2023

Section 5(b) of the Inspector General Act of 1978, as amended (Inspector General Act), requires the

Commission to transmit to the appropriate committees or subcommittees of the U.S. Congress a

Management Report, containing certain statistical tables and any comments deemed appropriate, to

accompany the Office of Inspector General’s (OIG’s) Semiannual Report. 1 This Management Report

presents the required information for the reporting period of April 1, 2023 through September 30,

2023.

I.

Overview of SEC Audit Follow-up Activities

The SEC is committed to timely completion of corrective actions on OIG audit, inspection, and

evaluation recommendations. At the commencement of this semiannual reporting period, there

were 45 open OIG recommendations. During the period, management succeeded in obtaining OIG

concurrence to close 35 recommendations. Of the 35 closed recommendations, management

submitted 22 (or 63 percent) requests for closure in less than one year. The SEC also received 4

new OIG reports during the reporting period containing a total of 2 recommendations for improving

the agency’s processes and programs. At period-end, final action was pending on 12

recommendations from 6 reports. One of those recommendations was pending OIG concurrence for

closure.

II. Reports on Instances of Whistleblower Retaliation

Section 5(b)(3) of the Inspector General Act requires the SEC Management Report to include a

statement with respect to any settlement agreement entered into by the agency with an official

found by the Inspector General to have engaged in retaliation against a whistleblower. The SEC has

no such settlement agreements to report.

III. Reports with Monetary Savings

Section 5(b)(2) of the Inspector General Act requires the SEC Management Report to include

statistical information regarding any management decision or final action taken on each audit,

inspection, or evaluation report on which final action had not been taken before the reporting

period. The information required to be reported includes the dollar value of any “disallowed cost”

or “recommendation that funds be put to better use.”

The Inspector General Act defines a “disallowed cost” as a cost questioned by the OIG that agency

management has decided should not be charged to the agency. The Inspector General Act defines

“recommendation that funds be put to better use” to mean an OIG recommendation that funds

could be used more efficiently if management took actions to implement and complete the

accompanying recommendation. During the reporting period, OIG did not issue a report that

contained any questioned costs or any recommendations that funds be put to better use. In

1 The SEC’s Management Response is based on the requirements of Section 5 of the Inspector General Act as

amended by the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, Pub. L. No. 117-263,

§ 5273, Dec. 23, 2022, 136 Stat. 2395, 3241.

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addition, there are no outstanding management decisions on questioned costs or recommendations

that funds be put to better use identified in OIG reports from prior reporting periods.

Additional information regarding management decisions and final actions taken during the

reporting period for reports on which final action had not been taken before the reporting period

began is included below in the next section and Table 1.

IV. Reports with Pending Corrective Action

Section 5(b)(4) of the Inspector General Act requires the SEC Management Report to include a

statement with respect to each audit, inspection, and evaluation report on which a management

decision has been made but final action has not been taken. Table 1 presents the required

information.

Table 1. Reports Pending Final Action at Start of Reporting Period

(Reporting Period April 1, 2023 through September 30, 2023)

Report No./Title for the 10 Reports with

Pending Final Action at Start of Period

Report Date

Status of Final Action

Final Action Completed: 5 Reports/ Pending at End of

Period: 5 Reports

Report 546: Audit of SEC's Compliance

with the Federal Information Security

Modernization Act for Fiscal Year 2017

3/30/2018

Nineteen of the report’s 20 recommendations

have been closed with OIG’s concurrence.

Completion of corrective actions on the remaining

recommendation is anticipated in fall 2023.

Final action taken during reporting period.

Report 559: The SEC's Office of BrokerDealer Finances Provides Effective

Oversight, But Opportunities To Improve

Efficiency Exist

2/26/2020

Report 562: Opportunities Exist To

Improve the SEC's Management of Mobile

Devices and Services

9/30/2020

Report 563: Fiscal Year 2020 Independent

Evaluation of SEC's Implementation of the

Federal Information Security

Modernization Act of 2014

12/21/2020

Six of the seven recommendations have been

closed with OIG concurrence. Corrective actions

addressing the remaining recommendation are in

progress, with anticipated completion by the end

of calendar year 2023.

Final action taken during reporting period.

Report 570: Fiscal Year 2021 Independent

Evaluation of SEC's Implementation of the

Federal Information Security

Modernization Act of 2014

9/29/2021

Final action taken during reporting period.

Report 572: The SEC Can Improve in

Several Areas Related to Hiring

2/28/2022

Final action taken during reporting period.

Report 574: Fiscal Year 2022 Independent

Evaluation of the SEC’s Implementation of

the Federal Information Security

Modernization Act of 2014

11/15/2022

Report 575: SEC’s Whistleblower Program:

Additional Actions Are Needed To Better

Prepare for Future Program Growth,

Increase Efficiencies, and Enhance

Program Management

12/19/2022

Eight of the 13 recommendations have been

closed with OIG concurrence. Corrective actions

addressing the remaining recommendations are in

progress, with anticipated completion dates for

four recommendations by the end of calendar

year 2023 and one recommendation by fall 2025.

Final action taken during reporting period.

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Report No./Title for the 10 Reports with

Pending Final Action at Start of Period

Report 576: Enforcement Investigations:

Measures of Timeliness Showed Some

Improvement But Enforcement Can Better

Communicate Capabilities for Expediting

Investigations and Improve Internal

Processes

Report 577: The SEC Supported Federal

Small Business Contracting Objectives, Yet

Could Make Better Use of Data and Take

Other Actions To Further Promote Small

Business Contracting

Report Date

Status of Final Action

Final Action Completed: 5 Reports/ Pending at End of

Period: 5 Reports

2/15/2023

Completion of corrective actions on the three

recommendations are anticipated by spring 2024.

2/28/2023

Seven of the report’s eight recommendations

have been closed with OIG’s concurrence.

Completion of corrective actions on the remaining

recommendation is anticipated in fall 2023.

All management decisions for the listed reports were made during prior reporting periods. For the

5 reports listed in Table 1 for which final action was taken during the reporting period, none of the

reports involved any questioned costs or recommendations that funds be put to better use.

Section 5(b)(4)(A) of the Inspector General Act states that a report may be excluded from the list of

reports pending final action if (i) a management decision was made on that report within the

preceding year or (ii) the report is under formal administrative or judicial appeal or management

has decided to pursue a legislative solution. In this report, the SEC did not exclude any such reports

from this list.

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